Pharmaceutical company Amphastar Pharmaceuticals (NASDAQAMPH) fell short of the market’s revenue expectations in Q1 CY2025, with sales flat year on year at $170.5 million. Its non-GAAP profit of $0.74 per share was 7.6% above analysts’ consensus estimates.
Is now the time to buy Amphastar Pharmaceuticals? Find out by accessing our full research report, it’s free.
Amphastar Pharmaceuticals (AMPH) Q1 CY2025 Highlights:
- Revenue: $170.5 million vs analyst estimates of $173.9 million (flat year on year, 2% miss)
- Adjusted EPS: $0.74 vs analyst estimates of $0.69 (7.6% beat)
- Operating Margin: 21.9%, down from 27.9% in the same quarter last year
- Market Capitalization: $1.16 billion
Company Overview
Founded in 1996 and known for its expertise in complex drug formulations, Amphastar Pharmaceuticals (NASDAQ: AMPH) develops and manufactures technically challenging injectable and inhalation medications, including both generic and proprietary pharmaceutical products.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Amphastar Pharmaceuticals grew its sales at an impressive 17.4% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Amphastar Pharmaceuticals’s annualized revenue growth of 18.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Amphastar Pharmaceuticals missed Wall Street’s estimates and reported a rather uninspiring 0.8% year-on-year revenue decline, generating $170.5 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Operating Margin
Amphastar Pharmaceuticals has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 22.6%.
Analyzing the trend in its profitability, Amphastar Pharmaceuticals’s operating margin rose by 22.9 percentage points over the last five years, as its sales growth gave it immense operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 3.6 percentage points on a two-year basis.
In Q1, Amphastar Pharmaceuticals generated an operating profit margin of 21.9%, down 6.1 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Amphastar Pharmaceuticals’s EPS grew at an astounding 60.9% compounded annual growth rate over the last five years, higher than its 17.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of Amphastar Pharmaceuticals’s earnings can give us a better understanding of its performance. As we mentioned earlier, Amphastar Pharmaceuticals’s operating margin declined this quarter but expanded by 22.9 percentage points over the last five years. Its share count also shrank by 1.3%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
In Q1, Amphastar Pharmaceuticals reported EPS at $0.74, down from $1.04 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 7.6%. Over the next 12 months, Wall Street expects Amphastar Pharmaceuticals’s full-year EPS of $3.56 to shrink by 7.3%.
Key Takeaways from Amphastar Pharmaceuticals’s Q1 Results
It was encouraging to see Amphastar Pharmaceuticals beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Overall, this quarter could have been better. The stock traded down 1.7% to $24 immediately following the results.
Amphastar Pharmaceuticals underperformed this quarter, but does that create an opportunity to invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
